Lawyer: Buyers have the right to resell copyright-protected works

U.S. residents who buy products protected by copyright shouldn't have to worry about where those products were manufactured before reselling them, a lawyer told the U.S. Supreme Court Monday.

If textbook maker John Wiley & Sons has its way, it could be illegal for U.S. residents to resell a large number of products made overseas, said lawyer Joshua Rosenkranz, representing Supap Kirtsaeng, a Thai man who financed his U.S. college education by importing textbooks he could buy cheaper in Asia and selling them on eBay in the U.S.

The Supreme Court heard arguments on Monday about whether to uphold a U.S. Court of Appeals for the Second Circuit ruling that could outlaw the resale of large numbers of products made outside the U.S., including books, CDs, DVDs and software. John Wiley & Sons sued Kirtsaeng for reselling versions of textbooks intended to be distributed outside the U.S.

The textbook maker argued the first-sale doctrine in U.S. copyright law applies only to products manufactured in the U.S.

But the first-sale doctrine allows buyers of material protected by copyright to resell it, no matter where it was produced, Rosenkranz argued. Copyright law does not give copyright holders "endless, eternal downstream control" over the sale of their products, he said.

Some justices questioned Rosenkranz's reading of the law, however. Copyright law has recognized the rights of copyright holders to control distribution in some cases, said Justice Ruth Bader Ginsburg. "Your position is, once a copy is sold anywhere, the copyright owner loses control of distribution everywhere," she said.

Much of the debate centered around the meaning of "lawfully made under this title," in section 109 of U.S. copyright law. "The owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord," the law reads.

In its 1976 revision of copyright law, the U.S. Congress focused on preventing pirated copies of products to be sold in the U.S., Rosenkranz argued. The emphasis in the phrase, "lawfully made" was on the word, "lawfully," he said.

Therefore, products manufactured overseas in compliance with U.S. copyright law would be subject to the first-sale doctrine, he said.

If the first-sale doctrine were limited to products made in the U.S., then U.S. companies would have a huge incentive to move manufacturing overseas and limit the resale of their products, Rosenkranz said.

Theodore Olson, representing the textbook maker, argued that section 602 of U.S. copyright law is clear in outlawing the importation of copyright-protected materials without the permission of the copyright holder.

But in that case, an owner of a Toyota car manufactured in Japan couldn't resell it if the GPS or audio system had components protected by copyright, said Justice Stephen Breyer. A library couldn't lend a foreign-made book, and a museum couldn't display foreign-made art, without permission of the copyright holder, he said.

Those "hypothetical" examples differ from this case, in which Kirtsaeng was importing textbooks in competition with the publisher, Olson answered.

The justices need to consider the possible effects of ruling in the favor of the textbook maker, Justice Samuel Alito countered. "We need to think about the consequences of our decision," he said.

Sections 109 and 602 of copyright law seem to conflict, said Justice Elena Kagan. "I find this language a little bit perplexing," she said. "I can kind of see it both ways."

Public Knowledge, eBay and Goodwill Industries filed briefs in support of Kirtsaeng, while the Business Software Alliance, the Software and Information Industry Association, and the Motion Picture Association of America filed briefs in support of John Wiley & Sons.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

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